Direct Payment Pilots fail to collect 8%
- 17 Dec
Data released today on the Direct Payment Pilots of benefits show landlords failed to collect 8 per cent of rent on average in the first four months of the pilot projects.
Arrears were double the normal value, and as a result, 316 of the tenants have already been switched back to payment of benefit to the landlord.
6,220 tenants across Great Britain were paid directly in the six projects and 92 per cent of rent was collected on average overall, meaning arrears were around double the normal figure. The year-long projects are testing direct payment of housing benefit ahead of the roll out of universal credit next October.
Universal credit, which combines a number of benefits into one monthly payment, will be paid direct to tenants in a bid to encourage claimants to be responsible for their finances. This has raised concerns that landlords' rent arrears could rise, affecting credit ratings and their ability to borrow cheaply.
Each of the projects are testing different circumstances under which payment can be switched back to the landlord. They are also being used to test which groups of people should be exempt from direct payment and what kinds of support they need.
Rent collection levels in the project ranged from 88 per cent to 97 per cent and some landlords had trouble from the beginning, with tenants being taken to court.
Projects, involving teams of social landlords, are taking place in Scotland, Wales, Southern England, West Midlands, London and Northern England.
Lord David Freud, minister for welfare reform, said:
Direct payments of benefits will help people to step into the workplace without the many institutional barriers that now exist.
However, we have always been clear that exemptions must be in place alongside the right support for those who need it and the demonstration projects are showing us and the housing community the steps that must be taken.
The DWP has come under pressure to reveal findings from the project. It had indicated it would publish data last month, but attracted criticism from housing sector figures when it only published findings from a survey carried out before the pilots instead.
Source: Inside Housing
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